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Prospering in Tough Times
The importance of long-term planning, a healthcare initiative that focuses on cost savings through quality, and a three-prong effort to enhance company value through HR programs were on the agenda of a recent conference.
Prospering in Tough Times The importance of long-term planning, a healthcare initiative that focuses on cost savings through quality, and a three-prong effort to enhance company value through HR programs were on the agenda of a recent conference. By Michael O'Brien and Dave Shadovitz Tough economic times make it harder for executives to stick to the course of long-term planning. "The current economic uncertainty has many companies considering some tough choices, and it's easy in an environment like this to fall back on short-term thinking," said Wayne Mincey, president of the Miami-based Hackett Group, which brought international business leaders to Atlanta last week for its 18th annual Hackett Group Best Practices Conference. "But the best companies," he said during his opening address, "have always been looking out five years into the future, charting a course in finance, IT, and other key back-office areas that supports their larger business strategy." The annual conference -- which focused on the question: "Are You on the Right Path to World-Class?" -- was attended by nearly 400 business leaders from all over the globe, according to Hackett communications director Gary Baker. The break-out of this year's attendance was 38 percent C-level executives and vice presidents, 36 percent directors and 26 percent managers. In Mincey's address, he noted that "companies with staying power are the ones that have built strong and flexible infrastructures that enable them to predict and respond to shifts in demand and changes in the marketplace." Talent management is one of "the keys to the future," he said, adding that research from Hackett's 2008 Book of Numbers has shown that world-class companies spend almost one-quarter (23 percent) more per employee on technology than less-competitive companies, which resulted in "25 percent better service to employees and with 37 percent fewer managers."
C-Level Issues A panel discussion entitled "Addressing the Top C-Suite Issues" involved several high-ranking officials from top companies, each sharing their experiences with attaining, and maintaining, world-class distinction for their companies. C.J. Duvall, executive vice president of human resources for Little Rock, Ark.-based communications firm Alltel Corp., told the audience that his company seeks to "grow talent around the company's culture," and they have very specific personality traits they look for when identifying future leaders in the company. "We look for the most adaptable and open to change [personalities], and we try to promote those leaders," he said. Several break-out sessions were held that focused on human resources and how companies overcame great obstacles to achieve world-class status. In a session entitled "Creating Business Value by Managing Healthcare at Caterpillar," Sidney C. Banwart shared Caterpillar's efforts to more fully engage employees as consumers of healthcare. Banwart, vice president of the human services division for the Peoria, Ill.-based company, recalled how he went to his CEO and said, "I'm going to need more money than we originally benchmarked, but I'm going to deliver a really great return on that incremental investment." In an effort control healthcare costs, Caterpillar initiated co-pays and deductibles, but realized that more was needed. "We felt we pushed cost-sharing as far as we could ... and that quality was the next big opportunity," Banwart said. Collaboration with healthcare providers and transparency have become key components of its strategy, Banwart said. The company is now publishing quality data for local doctors and hospitals, and plans to make the information available to employees in the next 12 months, he said. "Doctors are typically straight-A students," he explained. "So when you publish a list of doctors, the ones at the bottom of the list want to be better fast." The company has also embraced evidence-based management. "There's an article in the New England Journal of Medicine that says it takes doctors 17 years to develop best practices," Banwart said. "If it took our business 17 years to develop best practices, we'd be out of business. Our objective here, together with our providers, is to dramatically alter that and get best practices and better care in a lot less than 17 years." In addition, Banwart said, Caterpillar has instituted a number of initiatives to increase employee participation in prevention and wellness programs. Employees receive reduced monthly premiums by participating in the company's voluntary "Healthy Balance" program, which encourages them to make positive changes aimed at reducing health risks. To promote healthier eating habits, Banwart added, Caterpillar began charging a premium for unhealthy food in its cafeterias. "If you want a greasy double cheeseburger, it's going to cost you $8.50; but if you want a healthy salad, it's going to cost you $2.50 or $3." Consequently, he said, "We've seen a huge shift in what people are eating at lunch." Banwart also described some of the steps that have been taken to better manage prescription-drug costs. "We found that three-quarters of our employees could get the same relief from Pepto-Bismol as they could from Nexium, the purple pill, so we make them try Pepto-Bismol first and if that doesn't work, then we'll pay for Nexium."
The Value of HR In another session entitled "Demonstrating a New Dimension in HR Value Delivery," Sunnyvale, Calif.-based Juniper Networks Inc.'s Executive Vice President of HR Steven Rice discussed how the company accelerated performance through leadership and employee engagement. Hackett has quantified the value created by HR, he said, adding that the company's research has found that "93 percent of world-class companies have HR at the table for major business decisions, compared to 63 percent for non-world class companies." In order to positively effect change at Juniper, the 12-year-old information technologies company created a variety of programs, including a 29-question employee survey that sought information on the most pertinent workforce issues. That survey was made available online and in six different languages to better reach the company's 6,000 employees working in more than 100 countries, Rice said. The HR department focused on three goals to create more value within the company, he said. "We aligned HR priorities to critical business success factors; we used engagement survey outcomes to increase employee retention; and we established a strong link between leadership capabilities and Juniper's ability to achieve results." Rice also said company CEO Scott Kriens now spends 20 percent of his time driving leadership initiatives and working with HR in order to achieve the company's long-term goals. Juniper also tied 20 percent of executive-bonus payouts to building leadership capability and completion of development plans, according to Rice. Ninety-five percent of employees now have completed development plans with the company, he said. "Without the support of the CEO and executive team, it would have been like pushing the proverbial wet noodle up the hill," Rice said.
April 29, 2008 Copyright 2008© LRP Publications |
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